Taxation Finance Act 2015 21st Edition Alan Melville - Solutions

A UK resident company has 19 subsidiaries, five of which are situated abro ad. In the year to 31 March 2018, the company had the following results:£UK trading profits 720,000 UK dividends received
Brist Ltd is a UK resident company which prepares annual accounts to 31 Mar ch. In the year to 31 March 2018, the company had a UK trading profit of £2,120,000 and received overseas property income
Tony died on 11 July 201 7, leaving an estate valued at £9 00,000. None of the transfers made on his death were exempt from IHT. He had made the following transfers during his lifetime:£3 May 2009
Phoebe made the following transfers during 2017-18:£12 April 2017 Gift to grandson 50 17 May 2017 Gift to her nephew on his marriage 3,000 3 August 2017 Gift to her husband 25,000 31 October 2017
Tracey is a sole trader. She has the following transactions during the q uarter to 31 December 2017 (all amounts shown are VAT-exclusive):£Sales to UK customers:Standard-rated 34,475 Zero-rated
Sebastian is self-employed. He drives a ca r with an emission rating of 19 8 g/km and he charges the cost of all the petrol used to his business bank account . In the quarter to 31 July 2017 , he
Sanjay began trading on 1 February 2017, selling standard-rated goods and services. He decided not to register for VAT voluntarily. His turnover (excluding VAT) for the first 16 months of trading was
T Ltd has owned 90% of the ordinary share capital o f B Ltd for many years. Both are UK resident. Recent results for the two companies are as follows:T Ltd T Ltd B Ltd y/e 31/3/2017 y/e 31/3/2018 y/e
The ordinary share capital of PP Ltd (a trading company) is owned 32% by QQ Ltd, 35% by RR Ltd, 23% by SS Ltd. The remaining 10% is owned by various individuals, none of whom own more than 1%. All
Bassnote Ltd is a wholly -owned subsidiary of Apex ine Ltd. Both companies are UK resident and prepare accounts to 31 March each year . The resul ts for the year to 31 March 2018 are as
U Ltd has three subsidiaries (one of which is dorman t) and has the following results for the year to 31 December 2017:£Trading profits 485,000 Income from property 12,000 Dividends received from
A company's share capital consists of 5,000 ordinary shares, held as follows:Number of shares Sejanus (a manager) 900 Claudius (a director) 400 Agrippa (a director) 300 Cleopatra (a director) 300
A company has the following results for its three most recent accounting periods:y/e 31/5/16 eight months y/e 31/1/18 to 31/1/17£ £ £Trading profits/(losses) 59,700 73,600 (155,700)Chargeable
A company has the following results for the year to 31 October 2017:£Trading loss (232,300)Income from property 190,200 Chargeable gains 45,540 Gift Aid donations 24,000 Assuming that a claim is
A company has the following results for the three years to 31 May 2017:y/e 31/5/15 y/e 31/5/16 y/e 31/5/17£ £ £Trading profits/(losses) (32,200) 23,800 40,300 Gift Aid donations 400 500 600
A company (which is not a member of a group) has the following results for t he 14 months to 31 December 2017:Accrued building society interest was £3,000 on 31 October 2016, £4,000 on 31 October
Timberlake Ltd prepares accounts to 31 March each year. The company made the following disposals of chargeable assets in the year to 31 March 2018:(i) In February 2018 , a rare Bentley motor car used
PCC Ltd is a manufacturing company which prepares accounts to 31 December each year. The company made the following disposals of chargeable assets in the year to 31 December 2017:(i) On 12 September
A company made the following disposals during the year to 31 March 2018:(a) A factory building was sold for £650,000 on 13 June 2017 (RPI 2 71.1). This building had cost £300,000 in August 2000
A company's income statement for the year to 31 March 2018 is as follows:£ £Gross trading profit 383,870 Receivable from other UK companies:Dividends 4,000 Debenture interest (Note 1) 6,000 Bank
A company has the following results for the year to 31 March 2018:£ £Trading profits, after capital allowances 1,561,400 Bank deposit interest (account opened 1 April 2017):Received 30 June 2017
A company's accounts for the 17 months to 30 June 2017 include:£Trading income 425,000 Debenture interest receivable:Received 31 October 2016 2,400 Received 30 April 2017 2,400 Accrued to 30 June
In 2010, Shaun bought 20% of the ordinary shares of an unlisted trading company. The shares cost £140,000. He owned the shares u ntil January 2018 when he gave all the shares to a friend. On the
Calculate the CGT payable in relation to each of the following disposals, assuming in each case that the annual exemption is fully utilised against other gains, that there are no allowable losses and
In May 2012, Ruth sold a freehold building which she had used exclusively for business purposes. The building was sold for £220,000, realising a chargeable gain of £42,500. In the following month,
In January 1981, Norman bought a freehold building for use in his business at a cost of£120,000. The building had a market value on 31 March 1982 of £125,000. In June 2013 he sold the building for
In August 2017, Susannah (a sole trader) gave a business as set to her son. The asset had been bought by Susannah for £91,500 in July 2008 and enhanced in May 2009 at a cost of £34,500. The ass
In September 2008 , Pamela bought a building for business use at a cos t of £150,000. I n September 2017 she sold the building for £261,400 and immediately bought another building, again for
In February 2009 , Maria bought a diamo nd necklace for £13,500. In 2011 the necklace was stolen and, as a result, an insurance payment of £14,000 was received in Febr uary 2012. In the same month,
In October 2007 , Matthew bought a pie ce of rare porcelain for £10,000. The por celain was damage d in early 2013 and in March of that year Matthew spent £3,850 o n restoration work. In July 201
Terry bought a house for £65,000 on 1 June 1997 and occupied the house as his principal private residence. He lived in the house until 1 June 2003 when he went to stay with relatives in Australia,
Samantha bought a ho use for £47,500 on 1 August 1996 and occupied the house as her principal private residence. On 1 June 1998 she began to use one -fifth of the house for business purposes.
Rupert bought a house in Manchester on 1 November 1995 for £7 5,000. He occupied the house until 1 November 1999 when he left to work abroad for a year, moving back into the house on 1 November
Melanie bought a house on 1 Jun e 1986 for £3 1,000. The house was sold on 31 December 2017 for £17 3,000. Compute the chargeable gain arising in each of the following cases:(a) Melanie occupied
Mohammed owns two properties - a flat in Central Lon don and a country cottage in Sussex. In general he lives in his London flat during the week and spends the weekends in his Sussex cottage. Which
On 9 May 2008, Steven bought 2,000 ordinary shares in Vexacon plc for £8,000. On 28 November 2013, he bought 500 ordinary shares in the company for £2,500.In March 2018, Danstreet plc made a
Susan made the following purchases of ordinary shares in Semicycle plc:Date No of shares Cost£11 January 2008 1,500 4,800 20 January 2015 1,140 5,700 In J anuary 2018 , the company went into
Saeed made the following purchases of ordinary shares in Hyban plc:Date No of shares Cost£24 August 1987 800 960 25 November 1992 1,200 1,440 26 February 1998 1,600 2,400 11 October 2007 400 800 In
Suzanne acquired the following ordinary shares in Quarine plc:Date No of shares Cost£2 October 1979 200 600 10 January 1981 150 500 5 December 2001 400 1,420 8 November 2008 250 1,160 24 July 2017
In June 201 6, Walter bought 10 ,000 shares in Ovod plc at a cost of £7 per share. In September 2017 , Rundico plc made a takeover bid for Ovod plc, offering the Ovod shareholders eight Rundico
(a) In November 2006, Yorick bought 6,000 ordinary shares in Togon plc for £30,000.In March 2018 , the company went into liquidation and Yorick received a first distribution of £1 per share. The
Yvonne made the following acquisitions of ordinary shares in Ranghi plc:Date No of shares Cost£30 September 2006 2,000 1,200 1 December 2010 3,000 3,600 In January 2017 , the company made a 1 for 5
William made the following acquisitions of preference shares in Pangol plc:Date No of shares Cost£17 February 2007 600 900 13 November 2011 200 400 9 October 2015 100 300 In January 2017 , the
Jeremy acquired the following ordinary shares in Scarlon plc:Date No of shares Cost£19 September 2009 4,000 16,000 20 October 2011 2,000 12,000 21 November 2013 1,000 7,000 22 December 2017 3,000
Sandra acquired the following ordinary shares in Pincom plc:Date No of shares Cost£29 January 1995 1,000 4,000 13 August 1999 1,000 9,500 4 October 2011 2,000 22,500 On 26 June 2017 , Sandra sold
A taxpayer makes the following acquisitions of preference shares in Muvex Ltd:Date No of shares purchased 10 August 2017 1,000 20 October 2017 200 1 December 2017 150 No further shares are acquired
In May 2009, Edward paid £350,000 to buy a 20 -year lease on a flat. In November 2017 he granted a 5 -year sub-lease on the flat to Petronella for £150,000. The flat was never Edward's principal
On 31 March 1980, Est elle acquired a patent with a 42 -year life at a cost of £21,000.The patent was valued at £22,000 on 31 March 1982 and Estelle sold the patent on 31 March 2018 for £13,000.
Katherine acquired a 40-year lease on a property on 31 August 1999 for £75,000. On 31 August 2017 she assigned the lease to Francesco for £97,500. The property was never Katherine's residence.
In June 2015 Katie acquired a 5-year option to buy a piece of land. The optio n cost her£10,000. In June 2017 she sold the option for £8,000. Compute the chargeable gain.
In January 2015 Katrina buys an item of movable plant and machinery for use in her business. The plant costs her £50,000 and capital allowances are claimed. Compute the chargeable gain arising in
In January 2018 Karl sells a one -quarter interest in a chattel for £2,500. On the date of this sale, t he remaining three -quarters interest is valued at £8 ,500. The chattel had cost Karl £3,850
In September 2017 Kevin sells a drawing for £2,000. He bought the drawing in February 2011 for £50,000 when it was thought (incorrectly) to be by a famo us artist. Compute the allowable loss.
In October 2017 Keith sells an antique cabinet for £7,200. He incurs incidental costs of disposal amounting to £200. The cabine t cost Keith £2,300 in July 2009 . Compute the chargeable gain.
Classify each of the following assets as either chattels, wasting assets or wasting chattels:(a) A domestic washing machine.(b) A gold ring.(c) A personal computer.(d) A 20-year lease on a
Karen bought a house in 1990 for £42,000. In November 1991 she spent £18,000 on dividing the house int o two self-contained flats. In September 2015 she sold one of the flats for £95,000, at which
Jon bough t a chargeable asset for £23,000 in May 1979. He incurred enhancement expenditure of £10,000 in June 1981 an d a further £14,000 in July 1998 . The asset was valued at £58,500 on 31
In June 2008 , Gillian was given shares with a market value at that time of £6,000. In November 2015 she made a successful claim to the effect that these shares now had a negligible value of only
Francis acquired an oil painting for £11 ,500 in March 1979. He sold the pa inting for£87,500 in March 20 18. Compute the chargeable gain or allowable loss arising on this disposal if the
Edwina bought a chargeable asset in August 2007 for £240,000, paying acquisition costs of £12,000. In June 20 13 she sold a one -quarter interest in the asset for £100,000, incurring disposal
David was given a c hargeable asset in November 2010 at which time the asset had a market value of £7,500. He sold the asset in January 2018. Compute the chargeable gain or the allowable loss if his
Carol purchased a holiday flat in December 2007 for £100,000. She spent £5,000 on installing central heating in February 2008 and a further £750 on repainting the in terior of the flat in March
Melissa is a sole trader. Her capital gains and capital losses for 2017-18 are £26,600 and£1,000 respectively. She also has capital losses brought forward fro m 2016 -17 of£13,200 and unrelieved
In 2017-18, Ahmed has capital gains of £13 0,000 and allowable losses of £24,000. He also has capital losses brought forward of £4,700.Ahmed's taxable income for 2017-18 (after deduction of the
On what date is CGT for 2017-18 normally due for payment?*17.8 Rosemary's capital gains and losses in recent years (and the annual exemption for each year) have been as follows:Gains Losses Annual
John dies on 3 March 2018 . Between 6 April 2017 and 3 March 2018, he has capital gains of £1,200 and capital losses of £15,400. His net gains in recent tax years (and the annual exemption for each
An individual has capital losses brought forward from previous years amounting to£4,800. Compute the individual's taxable gains for 2017-18 if total gains and losses for the year are as
In 2017-18, an individual has capital gains of £263,000 and allowable losses of £12,000.He has no unrelieved capital losses brought forward from previous ye ars. His taxable income for 2017-18
An individual has capital losses of £2,500 in tax year 2017-18. There are no unrelieved losses brought forward from previous years. Compute the individual's taxable gains for 2017-18 if capital
Which of the following are chargeable assets for CGT purposes?(a) shares in a limited company (b) gilt-edged securities(c) an antique table worth £20,000 (d) an antique chair worth £5,000(e) a
Which of the following disposals might give rise to a CGT liability?(a) the sale of antique furniture by a UK company(b) the gift of shares from husband to wife (assuming that the couple live
Leonard is employed and receive d a gross salary of £3,335 per month during tax year 2017-18. He also has a small business and paid 53 Class 2 NICs for the year. His trading income for 2017-18 was
Brenda is a company director and earns a regular monthly sa lary of £6,000. In December 2017 she received a £20,000 bonus. She is provided with a diesel -engined company car whi ch has an emission
Mark starts his own business on 1 August 2017 and is self-employed for 36 weeks in tax year 2017-18. His trading profit which is assessed to income tax for 2017 -18 is £9,250.Calculate the Class 2
Joan is a company director. Her salary is paid on the last day of each month. Her gross salary throughout 2017 was £8,400 per month but she was awarded a 4% pay increase as from 1 January 2018 . She
Compute the primary and secondary Class 1 NICs payable in relation to the following employees:(a) A earns £170 for the week ending 23 June 2017.(b) B earns £780 for the week ending 23 June 2017.(c)
Frances paid income tax and Class 4 NICs of £47,000 in 2016-17, of which £19,000 was paid via the PAYE system . Her total lia bility for 2017-18 is £69,000, of which £21,000 is paid via PAYE. Her
Jabran did not receive a notice to file a tax retu rn for 2016-17 but he was aware that he had income which had not been a ssessed to tax. He notified HMR C of this fact on 2 October 2 017 and a
Dorothy's income tax and Class 4 NICs liability for 2016-17 was £ 24,600, of which£600 was deducted a t source. Her liability for 201 7-18 is £ 28,000, of which none is deducted at source. She mad
For each of the following taxpayers, state the dates on which the 2017 -18 income tax is due to be paid and calculate the amount payable on each date. (Ignore Class 4 NICs).(a) Guy's 2016-17 income
Irma is sel f-employed. Her trading income for 2017 -18 is £64,880 and during the year she makes net contributions to a registered pension scheme of £6,00 0. Her only other income in 2017-18
Damon is a member of a defined benefit regist ered pension scheme. On retirement, he will receive an annual pension equal to 1/60th of final salary for each year of pensionable service. He will also
Karen belongs to a number of registered pension schemes. Until tax year 2009 -10 she had received no benefits from any of these schemes but in October 2009 she took a lump sum of £350,000 from one
An employer's contributions into a registered pension schemeduring the year to 30 June 2017 are £600,000. Explain how tax r elief will be given on the contributions of£1,860,000 which the employer
Freda is a member of a registered pension scheme which operates tax relief at source.She has income from self-employment of £60,000 in 2017-18 and makes pension contributions of £1,000 (gross) per
State the maximum contribution to registered pension schemes on which an individual could obtain tax relief in 2017-18 if the individual's earnings for the year were:(a) £120,000 (b) £1,200.
Cluppins and Raddle form a partnership on 1 November 2013 , preparing accounts to 31 May each year. Bardell is admitted as a partner on 1 January 2015 . Cluppins leaves the partnership on 29 February
Wardle, Jingle and Trotter began trading on 1 October 2015 , preparing accounts to 30 September each year and sharing profits in the ratio 7:2:1. Results for the first two years of trading are as
Dodson and Fogg began trading in equal partnership on 1 July 2014. On 1 July 2015 , they admitted Jackson as a partner and agreed to share profits in the ratio 5:4:1. The adjusted trading profits of
Pickwick, Snodgrass and Tupman are in partnership, making up accounts to 31 March annually. Each partner receiv es 6% interest on fixed capital. Pickwick and Tupman are entitled to annual salaries of
Nickleby, Copperfield and Drood have traded as equal partners for many years, making up accounts to 31 December each year. As from 1 April 2017 they agree to share profits in the ratio 1:2:2. The a
Craig began trading on 1 August 2015 and has the following results:Adjusted trading profits/(losses) Capital allowances before capital allowances claimed£ £year to 31 July 2016 5,460 1,140 year to
Olive ceases trading on 31 May 2017. Her recent adjusted trading profits/(losses) are:£year to 30 June 2013 37,450 year to 30 June 2014 39,190 year to 30 June 2015 16,120 year to 30 June 2016
Nathan begins tradi ng on 1 October 2015 , making up accounts to 31 December each year. His first two sets of accounts show the following adjusted trading losses:£15 months to 31 December 2016
Marcus begins trading on 1 January 2016 and has the following results:Adjusted trading profits/(losses) Capital allowances before capital allowances claimed£ £year to 31 December 2016 17,720 6,460
Jane is self-employed. Her recent adjusted trading profits/(losses) are:£year to 31 May 2014 (18,860)year to 31 May 2015 4,710 year to 31 May 2016 6,210 year to 31 May 2017 14,810 Jane has other in
Sally, who has been trading for many years, incurs an adjusted trading loss of £40,000 in the year to 31 December 2017.(a) What is her trading income for 2017-18?(b) If she makes no claim in
Raymond started trading on 1 October 2016. He chose 31 March as his accounting dat e and his first accounts were for the period from 1 October 2016 to 31 March 2017 . His purchases and sales of plant
Talat owns a large retail business and prepares accounts to 31 December each year. The written down value of his plant and machinery after deducting capital allowances for the year to 31 December
Norma has prepared a set of accounts for the nine -month period to 31 December 2017.The written down value of her plant and machinery at 31 March 2017 was as follows:£Main pool 178,400 Toyota motor

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Taxation Finance Act 2015 21st Edition Alan Melville - Solutions

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